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  "documentTitle": "Bristol-Myers Squibb Company (BMY)",
  "authorId": "03_Starboard_Value",
  "authorName": "Starboard Value",
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  "presentationDate": "2019-03-18 00:00:00",
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  "notes": "Uses a bar chart to illustrate the valuation gap and potential for multiple compression.",
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      "kind": "callout",
      "text": "Historical precedent suggests that Celgene's P/E multiple will continue to contract as the loss of REVLIMID's patent exclusivity draws near",
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      "kind": "callout",
      "text": "Historical precedent suggests that Celgene’s P/E multiple will continue to contract as the loss of REVLIMID’s patent exclusivity draws near.",
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      "text": "2019E P/E Multiple",
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      "text": "As shown on the previous slide, companies with impending patent cliffs typically trade at lower multiples. As such, prior to the deal, Bristol-Myers traded at a higher P/E multiple than Celgene. However, it is important to note that the combined company will also be facing a significant patent cliff, and as such, pro forma Bristol-Myers would likely trade at a lower multiple than standalone Bristol-Myers. Shareholders must be aware of this fact and factor in the potential value destruction from multiple contraction that will likely result from this deal. Management describes how they purchased Celgene for a bargain; however, we believe there is significant risk to Celgene's earnings as the loss of REVLIMID's patent exclusivity draws near. We believe this will manifest itself in a significantly lower multiple for the combined company.",
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      "text": "P/E multiple: 6.4x",
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      "kind": "paragraph",
      "text": "Given that Celgene's REVLIMID has one of the largest small molecule patent cliffs in history, we believe that the resulting multiple compression may potentially be worse than precedent would suggest",
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      "text": "The combined company will likely trade at a lower multiple than standalone Bristol-Myers, given the impending REVLIMID patent cliff.",
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      "kind": "source-note",
      "text": "Source: Bloomberg. (1) Wall Street consensus as of January 2, 2019 (closing price before announcement of Celgene merger).",
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      "text": "We Believe Celgene's Patent Cliff Will Adversely Impact the Combined Company's Valuation",
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